KEYSTONE XL:

Obama downplays job projections, concerns about environment in meeting with House GOP

Facing a skeptical audience of House Republicans yesterday, President Obama said he would soon decide on the fate of the controversial Keystone XL pipeline, in remarks that left lawmakers with split opinions on whether he ultimately will approve the project.

While the meeting primarily focused on taxes, spending and entitlement reform, Obama fielded a question from Rep. Steve Scalise (R-La.), who argued that approving Keystone XL and opening more lands to oil drilling could boost the economy, several attendees said yesterday. On Keystone XL, the president downplayed arguments being advanced by both supporters and opponents of the Alberta-to-Texas oil pipeline.

"I'm a little more optimistic," Rep. James Lankford (R-Okla.), who chairs the Oversight and Government Reform Subcommittee on Energy, Policy, Health Care, and Entitlements, said after the meeting. "Now, it's only a hunch, but his comment on Keystone was basically [that] he doesn't think it's going to provide as many jobs as was advertised, but he also doesn't think it's as big of an environmental risk as was being advertised, as well."

Obama also suggested that the pipeline primarily would benefit Canada, more than the United States, by facilitating an increase in oil exports. The 800,000-barrel-per-day pipeline would transport crude from Alberta's oil sands to refineries along the Gulf Coast.

"I don't see why that's a reason to minimize its impact," said Rep. Bill Cassidy (R-La.), noting that Canada is the largest trading partner of the United States and that domestic refineries also would benefit.

Obama implied a decision would be out soon.

"I felt more positive about it than negative," Rep. Cory Gardner (R-Colo.) told reporters after the meeting. "I wouldn't say he implied it [would be approved], but I do think that by the way he said there will be news on that in the next couple of weeks, it was more positive than negative."

It is unclear whether a decision could be coming as quickly as Republicans are expecting. The State Department just released a draft review of the pipeline, following a rerouting through Nebraska, and a final decision is not expected until July or August at the earliest (E&ENews PM, March 1).

Other members were not so encouraged by the president's remarks. Rep. Lee Terry (R-Neb.), who has floated legislation that would force Keystone XL's approval, said Obama had not offered a definitive time frame on a decision and compared his remarks on the project to "the environmental left's talking points."

Terry said he expected his Keystone XL bill would be formally introduced soon after the House recess, followed by hearings and markups in the Energy and Commerce Committee and a vote on the floor. The president's appearance before the GOP conference did nothing to derail or delay Republicans' desire to move that bill.

"We're going to move it," Energy and Commerce Chairman Fred Upton (R-Mich.) told E&E Daily yesterday, declining to offer a prediction on whether the president would ultimately approve the pipeline.

During the closed-door meeting, Scalise also pressed Obama on the need for more oil drilling. The two engaged in a brief back and forth when Obama noted that U.S. oil and gas production was up over the last several years, to which Scalise replied that the increase was happening because of development on private lands, while federal production has fallen.

Rep. Doc Hastings (R-Wash.), chairman of the Natural Resources Committee, said he also had a brief conversation with the president as the meeting was breaking up on the distinction between drilling on public and private lands, pointing to the difficulty of developing areas of the outer continental shelf and National Petroleum Reserve-Alaska, in particular.

"He has said oil production is up in our country. This is absolutely true. I have never denied that," Hastings told reporters after the meeting. "But most of that production is on private and state lands, and not federal lands, so there is a disconnect, and I pointed that out to him."

Reporter Jason Plautz contributed.